saying the fast and furious scandal was not a scandal. the winner of audacity of dopes award. >> how many times in your life mr. president have you been properly in love. in love with all of humanity. [ laughter ] >> i love all human beings. >> you can see all the awards at nrc.org. that is wrap this week. thanks to our panel. i'm jon scott. have a great new year. we'll see you again next week for another edition of fox news watch. >> gregg: fox news alert.

this in on the health of george h.w. bush, family spokesperson says his condition has improved and he has been moved from intensive care. mike is standing by live at the hospital. >> reporter: a bit of welcome news as the former president is ending his time in the intensive care unit. that his condition continues to improve. a lost reason for optimism. he spent shy of a week in the intensive care it was described as a stubborn fever he had a difficult time shaking. nasty case of bronchitis that had the president hospitalized since the end of november. the spokespeople working with bush people have been optimistic throughout this process and his

condition improves, all the way while taking the fact that he is an 88-year-old man sick. and noting the fact he is laughing and joking with the staff. even pointing out that yesterday at one point he was sing weigh the hospital staff. you know he got a pick me up from the oakridge boys fan and they sang a song to him. doctors feeling that his condition are so fragile they need to monitor him in the intensive care. >> gregg: it's a good sign when you are singing to the nurses. mike, thanks. >> gregg: another fox news alert the clock is winding down to the deadline, senate leaders are rushing up to a last ditch effort to avoid deep spending cuts and tax hikes for nearly

every american. i'm gregg jarrett. welcome to a brand-new hour. >> arthel: i'm art article. 11th how-hour scrambling after a meeting with president obama and leaders from the house and senate with high noon fast approaching, president is pushing to seal the deal. >> modestly optimistic that an agreement can be achieved. nobody is going to get hundred percent of what they want. let's make sure that middle-class families and the american economy and in fact the world economy are not adversely impacted because people can do their can't do their jobs. >> arthel: now the latest. >> discussions are ongoing but we shouldn't expect any announcements before senators are briefed. key players are pretty tight-lipped. after a white house meeting yesterday, one of the top negotiators sounded hopeful. >> we had a longs meeting in the white house, very constructive.

we hope that it will bear fruit. i think that the next 24 hours will be very instructive as to what we're able to accomplish. >> reporter: sources say john boehner referred to his senate colleagues and told them house leaders would consider their plan. one item raising the debt limit is not expected to be a part of any final compromise. if senate leaders fail the president wants congress to vote his plan keeping tax cuts for making $250,000 a year less, extending unemployment benefits for some 2 million people and delaying spending cuts until later this year. white house officials that top senate republican will be a key force in getting a deal after he made these comments. >> we are engaged in discussions majority leader and white house in the hopes that we can come

forward as early as sunday and have a recommendation that i can make to my conference and majority leader can make to his conference. among the issues to be hammered out is income level for extending president bush tax cuts. they send it on $250,000 but it sounds like $400,000 is where negotiations are heading. a leading republican senator says permanent is key giving certainty on tax rates that g.o.p. senators say a permanent solution for the alternative minimum tax that threatens 28 million americans every year would also help win republican voters. >> arthel: i know this is a very serious subject. when you see them all speak, it sounds like wa, wa, wa, wa. thank you mike. >> gregg: can i quote you on that? >> as mike reported president

obama is looking to break the fiscal cliff negotiations by giving an ultimatum to republicans either compromise on the budge deal or risk facing an up or down vote in the senate on a basic proposal that would include many elements that were previously rejected by the g.o.p. how well the next couple of display out and will the president's tactics work? joining us is jamie weinstein. what do you think of that? >> i don't know if his threats are going to work very much because even his proposal has to have the acquiescence of all senators. the fact of the matter is senators know whether they do something or not the next day after the fiscal cliff there is going to be a bill in congress to lower tax rates after all the tax rates expire below $250,000.

maybe at this point it looks like the big win that the republicans might get, if you want to call it that, is extending that slightly upwards to $400,000 or $500,000. this is bare bones deal. we're not solving our fiscal approximate and not discussing it. this is going to be fought another day, perhaps in a month with the debt ceiling. >> gregg: "wall street journal" probably had in an op-ed today the best line of the week. we'll put it up on the screen. the fiscal cliff melodrama is bad cabling reality show, real housewives of new jersey without the seven siartd without though not without the plastic surgery. they are phony and the "wall street journal" is basically arguing here the politicians are just like them. they are actors, pretending to

do something meaningful about crisis of their own creation and none of them seems terribly sincere about doing something fundamental in $16.4 trillion. fair point? >> but the real issue is $80 trillion in unfunded liabilities entitlement programs which no one is talking about. it's amazing. i think "wall street journal" is right on the point. we've had all this discussion for the last several months and frank liquor to the last four years of raising taxes on the rich, above $250,000 which a basically a moral argument. it doesn't a dent in the $80 trillion in unfunded liabilities. entitlement reform and president obama doesn't want to talk about it. he wants to focus on the tax rates which is for all intents and purposes utterly irrelevant.

>> gregg: so in other words, we can count on tax increase to finance even more spending without doing anything significant that same reckless spending? >> right. no one wants to touch entitlement reform because it's not popular and to might not be popular. but it's necessary. whether you do it today or ten years from now, something is going to be done because we don't have $80 trillion of unfunded liabilities to meet the cost. hopefully in a month from now maybe there is going to be more talk about what i can do with entitlement reform. until that is addressed, servicing noise. it happens on both sides. >> gregg: it's like wa, wa, wa. for incriminations there is plenty going around. it's all john boehner's fault.

there is something to that i suppose. >> i think there is some recrimination that could go around but the president is leader. he hasn't led on this in four years. having this last minute type of thing where he comes out and acting tough when he was just away for week in hawaii. everyone deserves a nice christmas holiday but not when we have serious issues that need to be addressed. i don't think the president has led on this. the american people are also partly to blame here. there was an election and he left in place everything the same. the house is the same. senate is basically the same. you voted for basically more of the same. american people don't escape blame either. >> gregg: van hollen basically has the same argument, he has been out for 12 days and vanhollen, boehner would not touk talk to him.

i'm not sure i buy that. if it does go to the fiscal cliff and we go over it, sequestration would cut only $109 billion next year. that is actually not a lot in a budget of almost four trillion, is it? >> it's not a lot of the total number, half of that goes to defense which are own admirals and generals have said and secretary of defense would be devastating. this comes on top of -- $50 billion in one year to the defense. and it doesn't touch at all medicare and the other entitlement programs. >> gregg: biggest drivers and cost and absolutely nothing has been done about those things? >> it's criminal. she is things are going to

destroy us. we can live with higher taxes, you might not think it's the best idea on the rich. i think it's a way to go about it but we can't survive we are without adjusting our entitlement reform unless it is addressed. >> gregg: jamie weinstein, it's criminal -- i didn't take it that far but you do did. >> without a fiscal cliff teal the pentagon is bracing for $500 billion but that is over the next decade and raises questions how military leaders plan to keep the nation safe. >> last friday when president obama rolled out his new plan for steering us away from the fiscal cliff there was word he did not say, that word was, sequester, the sequester would automatically cut more than a hundred billion from the budget next year, half from domestic programs and half from defense

programs. as the deadline draws close, experts are looking at national security standpoint and warning one final time about the impact on the safety of our service members. >> it's going to affect the operational force that is deployed in terms of its ability to maintain equipment, to get repair parts. that force is delayed around the world, not just the force in afghanistan that is being reduced. it would impact on the training of the force and preparedness. >> reporter: white house officials say it's unclear what is going to happen. on friday john mccain said he doesn't see how a deal gets done without addressing the cuts. >> a lot of defense contractors will be okay, they have significant cash reserves but smaller contractors would haveef credit extended, trouble keeping their employees if they can't be

assured of continued employment. >> reporter: only way to avoid the automatic $492 billion in cuts that the pentagon over the next nine years is for congress to make a deal in the next two days. >> gregg: we still have much more on the cuts and bob scales will be joining us to talk about the impact. >> arthel: we have new details of the deadly plane crash out of russia. police say that four crew members are dead and four others have been injured after an airliner slammed into the international airport overshooting the runway and crashed into a nearby highway. officials say the plane which can carry up to 210 passengers was empty as it was on its way from the czech republic. they are looking into whether a powerful snowstorm may be to the blame.

>> thousands of firefighters across the u.s. and canada are traveling to western new york to attend the memorial services for two fallen heroes. they were shot and killed on crime eve. the shooter killed himself at scene and had served 17 years in prison for killing his mother. a woman allegedly helped purchase the weapon. the community is coming together that all the visiting firefighters have a place to stay. many of them will be staying at hampton inn there for free. >> gregg: new developments in the investigation of a subway shoving death in new york city. police saying a woman is in custody after she made statements implicating herself. investigators released this sketch after the incident. they say the victim died thursday night when a woman pushed him on to the tracks in front of an oncoming train.

surveillance video shows the suspect running away afterwards. name of the woman in custody is being withheld pending formal charges. >> arthel: is military facing a new threat? mandatory spending cuts putting pressure on the pentagon. can it still do the job of protecting america if a zeal not reached in washington? >> gregg: just days after a major storm, a nay one is following right on its heels. we're tracking the latest. >> and reading, writing and guns new push to protect our kids in schools after the sandy hook tragedy. >> it is legal in utah. >> i actually brought a holster but nobody would know i could easily git get it and stays on me all day.

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>> gregg: upper ohio river valley, forecasters are expecting the heaviest up to 8 inches in southern new england tonight and it will make for dangerous travel. the storm has dumped several inches of snow on parts of pennsylvania. here live look outside the new york studios. new york is seeing a mix of rain and snowfall. we'll continue to track the new storm and bring you the latest updates. >> arthel: we are just getting word of first legal action stemming from the shooting in connecticut.

a girl suing the state for one million dollars. she is suffering from trauma adding that her friends were killed, all of them. attorney says the lawsuit is about improving school security, not the money. state of connecticut has what is called sovereign immunity from most lawsuits and they have to get permission from the state's claim commissioner. >> gregg: in the wake of sha shooting, protecting our children is certainly taking on new urgency. utah is providing 200 teachers with six hours of training in handling of concealed weapons. other states are tackling how to keep the kids safe now floating proposals to arm teachers with guns hoping to prevent a tragedy like in the one in newtown, connecticut from happening again. claudia is following the story.

>> with the prospect of tighter gun laws, in colorado, law enforcement officials say they need more money to conduct the surge in criminal background checks that are required for gun buyers. they are going to ask law makes for half a million dollars to speed up the process which used to take about half an hour and now takes about a week. process is free which has one lawmaker suggesting that those that want gun pay for it themselves. telling the denver post, quote, anyone else whether a teacher or law enforcement officer anyone needing a background check needs to pay for it. meantime, her it's already legal to carry a gun a record number of educators attended a training seminar earlier this week. >> we are teachers, all school employees for their application

and permit to carry a firearm. in utah they have the advantage of beings able to carry one in schools. we do not restrict law abiding with a permit of carrying one in a school. >> hawaii, new hampshire and oregon allow them to carry one on campus. arizona and washington state looking into the proposal. it will face stiff resistance from gun control advocates including teachers that say guns have no place in schools. >> gregg: claudia in los angeles thanks. >> arthel: meanwhile, there is another controversial response to the recent shooting now having one new york state lawmaker fighting for the rights of gun owners. a local newspaper published a map on its website with the names and addresses of people in the area with pistol permits. now state senator gregg ball is speaking out against it.

to take the names of people obeying the lay and properly registered and treat them like criminals is assinie. >> it's now before the new york state legislature. >> if the nation goes over the fiscal cliff the military will need to make billions of dollars in cuts. so what can the pentagon get rid of while still keeping the nation safe? analyst bob scales will be here in a moment to tell us. [ sniffs ] i have a cold. [ sniffs ] i took dayquil but my nose is still runny. [ male announcer ] truth is, dayquil doesn't treat that. really? [ male announcer ] alka-seltzer plus fights your worst cold symptoms, plus it relieves your runny nose.

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>>. >> arthel: it is the bottom of the hour, time for top of news, friends and family of two new york firefighters are spaying their respects at a wake today in western new york. police say they were shot and killed on christmas eve by william spangler when they responded to a fire he set. >> gregg: president george w. h bush is out of the hospital where he is receiving treatment for bronchitis. >> arthel: new round of meetings on capitol hill as president obama presses law makes to strike a deal. if they fail nearly all americans will see smaller paychecks and drastic cuts to federal spending. under the plan, the pentagon

would lose about $500 billion over the next decade. cuts are so steep, defense secretary leon panetta saying that the military is not planning for it but without a deal this situation is days away from becoming a reality. so how will military leaders protect the country if this goes over the fiscal cliff is the question? let's bring in fox military analyst, job bob scales. let's break it down and tell me if we were to go over this cliff what would it mean in terms of the troops in morale and manpower? >> defense department is already given up half a trillion dollars over the next ten years. this doubles that to a full trillion dollars. what is the easiest thing, expenditure to get rid of? it's people. now, the surface chiefs in marine corps and army have done

a good job of keeping the faith with their soldiers and marines by promising them no one would be let go involuntarily with the first set of cuts. with the second set of cuts all those bets are off. we may see, if it happens some people with four or five tours finding themselves them and their family on the street. that is what has most senior leaders concerned is this simple and tragic break of faith. >> arthel: do we know if it would affect retirement? >> it would accelerate retirement. in other words, one of the things they have done well is sort of bracket or fence both military pay and military retirement. it may affect their medical care but for those that stay in the service they won't see any reduction in their paychecks. >> arthel: morale would take a

hit? >> yes. when i was a kid, my dad was in the army i saw reduction in the force did to the morale. it almost broke the back of the army back in the day. something like this to happen again, particularly after ten years of war, not only the involuntary loss of our servicemen and women but a huge reduction what is costs for fuel and maintenance. so the soldiers we retain find less time to train and our equipment will begin to break and new equipment coming online, that whole process will come to a halt. the total effect of this i think would be tragic. >> arthel: you were talking about the possibility of new equipment coming online would come to a halt. there is another side to the argument that says with the introduction of drones into fighting wars there is a less of need for military machinery and so many boots on the ground.

do you feel there is any wiggle room at this point for cuts to the defense department? >> i think that the cuts, the half trillion dollars those cuts have been made are fine. they are going to hurt the military but they are fine. add another half trillion dollars, the drones you just talked about and cyber warfare merle and the new ships, planes and tanks, that is not going to happen. a navy of 200 ships, marin corps of a less than 150,000 and huge cuts in the air force modernization plans. the long term effect is serious. >> arthel: did you say cyber warfare would fake o take a hit? >> remember, cyber warfare isn't just people but it's equipment.

this is a brand-new realm for folks in dod which we're starting over if from scratch. to have that effort in some cases truncated because the inability to bring on new computers and freshly cyber trained officers would have an effect. >> arthel: i'm sure the world is watching that for sure. leon panetta said it's too early to say what sequestration means and it doesn't require immediate reduction of spending and wouldn't affect military personnel and president obama says his intent to exempt the accounts to pay for military personnel. does it mean anything to you? >> it's going to preserve pay scales but you don't take half a

trillion out military without affecting people. i think both chiefs of army and marine corps have said that. we're going to have to go active duty military, those that have served four, five, six tours in afghanistan and tell them they need to leave prematurely and think that is wrong. >> arthel: we appreciate your perspective. >> gregg: overseas in france, a high court has now just struck down a 57% income tax rate on the richest citizens they're saying it's excessive and unfair and unconstitutional. the ruling is a huge blow to the president who had promised during his campaign to raise taxes on the wealthy. katherine field is a correspondent for global radio news and joins us from paris. what did the courts say about this.

>> reporter: good morning. the constitutional court said in essence that the tax failed to recognize a quality before public burden. it was going to applied to individuals rather than households. the courted noted that the top rate would apply to a married couple a as if one member were in the income bracket and 57% rate would not apply. so in essence this controversial tax is being rejected on a technicality. it's embarrassing for the socialist president alleand. you know just despite the court is saying the government has not backed down and was within the last few hours and saying the law will be tree ree drafted to con forp with the court's

ruling. nevertheless, there is spill widespread support for this tax. they are planning to speak in belgium and wealthy entrepreneurs have moved to countries in the region that have lower taxes. today's decision could delay those departures for the time being. >> gregg: katherine, live in paris, thanks very much. >> the president may want to check out the laffer curve before he rewrites that law. when people flee or stop working that is the laffer curve. >> arthel: your french reporter was there, how about this, you got plans for new year's eve. >> gregg: that is impressive.

>> it starts at 11:00 p.m. eastern and megyn kelly and bill hemmer will bring you the event live in times square and new york city. you can be a part of the broadcast by texting your happy new year's messages to the show. here how you do it. you type the the u text, got it. type a space and ascend brief message. utext space and your message and type 36288. >> gregg: oui. that is all i know. so now they squabble the tax hikes but now is time for president obama to be talking about raises in washington. who is going to get a bump in pay. new reports that secretary of

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the adt new year's sale. it could help you save something more important than money. call now to save $300 on adt starting at $99 installed plus 15% off accessories. sale ends midnight january 2nd. >>. >> arthel: welcome back. fiscal cliff crisis taking a toll on consumer confidence. putting things in context, here it is.

a score of 90 on the conference board's index means the economy is healthy. last time we saw that number was 2007 before the start of the financial crisis. over the last two months we've seen steady declines. november's report showed a score of 71.5 and 65.1 in december. that is lowest number we've seen since august. joining us now for more on this is jonathan hunt, portfolio manager for capitalist pig hedge fund. contributor to for fox news channel, good to see you. >> happy new year. >> consumers have no faith in congress, guys get your act together. if there is a deal tomorrow, how do you think is this is going to affect consumer confidence over the next six months? >> it might slightly help but already there is a tremendous damage done. it's no surprise that consumers are not confident. to be confident you have to have

some slight semblance of certainty and we haven't had anything like that. consumers want to think long term and budget but trillions of dollars and hundreds of millions of people waiting to fined out what president and congress do at the last minute. not only is the indicator numbers down but the dow took a dump on friday and it's been down for five straight days. >> arthel: something i touched on the intro. current economic conditions rose to the highest since 2008. what is driving that part of the equation? >> i think producers are trying put money to work. unfortunately they are battling terrible headwinds but the headwinds, you have a tremendous amount of money that has been quite some months waiting to be invested, waiting to be put toward productive uses, buying plants and investing equipment.

producers not knowing what the score is going to be couple hours, 48 hours from now. >> arthel: then the national retaillight federation, forecasting total sales up 4.1%, coming up $586 billion. what is going on there? >> think people like christmas. they are looking for those deals and looking to shop and trying to be rationale. i'm happy to see any indication even a slight uptick of the economy. nowhere we are no historically. people aren't shopping but people aren't producing. there has been tremendous amount of money withdrawn from the stock market that is not money available for jobs and plants. we are happy to see any positive news of the economy, there is no question this tremendous uncertainty, not brought by the economic reality but

specifically by government there is no question, had a massively zrif impact on the economy. any resolution to this uncertainty, will likely be a plus for the economy. i think that is part of the problem here. how can you invest 15-20 years out knowing that congress and the president simply keep kick the can further down the road. not addressing the basic underlying program of our instability. we know the taxes and everyone investors are ready for higher taxes but it makes it reluctant to make the investments not knowing what is going to happen three to five years down the line. >> arthel: how does it affect you and your clients' important photo yeos? >> i think a lot of investors have taken money off the table.

higher taxes off the table they made withdrawals from stock mute funds and sold stocks, as well. unfortunately it brings an unnecessary detriment into the investment equation. it's hard enough to figure out how many pampers wal-mart is going to sell but how mitch mcconnell and president are going to do in the future. so it's causing people to pull back from making investments and that is what powers the economy in the long run. >> arthel: here is a question. we all paid those higher taxes when president clinton was in office and everybody seemed to be doing well. so what is different now? the same people paying higher taxes then, why are they reluctant now. they feel the government doesn't know what to do with the money? >> we know what they do with the money, they waste a tremendous amount of it. to president clinton's credit those tax hikes came within the

environment of deregulation, rules were cut back and we have the opposite going on right now. consumers elect to go spend but consumers are reluctant and producers are going up and regulatory costs makes it hard to make a buck in this type of environment. >> arthel: all right. happy new year. thank you so much. >> secretary of state hillary clinton is returning to the state department next week after three weeks off from a stomach virus and concussion that kept her from testifying on the terror attack in libya but republican lawmakers still want answers. the question that secretary of state may be facing when she goes to the hill in just a moment. >> arthel: just released papers from former british prime minister margret thatcher

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>>. >> arthel: recently released documents showing margret thatcher in a rare visit made by ronald reagan back in 1982 including a case of bruised feelings after president reagan failed to reply in a timely manner to a personal invitation sent directly to him from queen elizabeth ii. invitation like that usually gets a response within a matter of hours or days at the most but the president let it languish for weeks. >> gregg: i would respond right of way. she one be writing me anytime soon. new reports that hillary clinton will return to work eave three

weeks of recovery from a stam to be virus and a concussion following a fall. waiting for her front and center are a bunch of lawmakers who got a bunch of questions over the benghazi terror attacks. what do we expect to hear from secretary clinton. joining us is k.t. mcfarland, one takes her at her word when she and spokesperson says she is ill. she has certainly managed to dodge a lot of this event since september 11th. >> yeah, she said she would take full responsibility but she has avoided taking any blame. one thing i think with the hearings, this will probably be the last opportunity as they lawmakers will have to question her as secretary of state. i hope instead of looking back and saying, what did you know, why didn't you talk about the video, i hope instead they focus

forward which is why have you not responded. why haven't the responded after these attacks. we know that ten years ago, in the late 1989 and embassies were bombed, 2000, u.s.s. cole was bombed, we beefed up security and changed the rules of engagement but we never went after al-qaeda. what happened as a result, bin laden said, let's go get them again. my concern and i hope these lawmakers and secretary clinton, why has the united states not gotten these people who killed ours. we know where those people are. we could do a drone strike against them. second point, why in two years have we gone for a middle east that was stable and secure to a middle east that is political and economic chaos and governments that are anti-american and increasingly

turned over to islam radicals. >> gregg: are you saying that president obama's foreign policy is feckless and weak? >> i'm saying, you make your own decision. two years ago the middle east was a stable place, a government that was pro-american. they were not at war with israel. fast forward two years later, we have been very involved in toppling those dictators in the middle east but we have stepped back as those countries struggled to find new governments. they found islamist governments. we did not help them in pro democracy election. whether you talk about libya, vipt or any of the countries they were all a lot worse off than two years ago. i think the secretary of state has a lot to answer for and to explain why. what did do wrong to have the policies that have allowed the united states essentially to be blamed for most of the problems in the middle east today.

>> gregg: the benghazi diplomatic mission was going to be a dangerous place. there had been previous attacks in and around it before the september 11th terror attack that killed four individuals. should we ask pretty direct questions about why you weren't protecting those people? >> yeah. what will she say? she will probably say, it was fog of war, we were unsure. we made some mistakes. the people who responsible making poor judgments have been disciplined. they have been given new responsibilities. i think she will skate over that. i think she'll skate over the fact that she didn't talk to the american people about what happened. >> gregg: then there is the question about why no assistance no rescue when these folks were under attack for seven long hours. allegedly the state department had realtime observance what was

going on there. should we ask about that? what would her involvement have been or strictly the pentagon and white house? >> no, no. there would have been, as i understand it and fox news broke the story, any classified computer was able to call up in realtime the surveillance from that drone. that would have been computers at the state department, defense department, c.i.a. maybe the white house situation room. i think she should be asked those questions. why were there was no relief. i suspect she will say we couldn't get there in time, and if you go back there was the opportunity. they didn't know how long the attack was going to be, one hour one day, two days so why not try? i know when ways in beirut we tried to rescue our own during that bombing. >> gregg: many thanks. >> arthel: as the mad dash on

capitol hill. senate leaders are trying to cut a last minute deal to avoid what the president says could be a quote, self-inflicted wound to the economy. we're live in washington with a look at where fiscal talks stand with just over two days to go. we're counting down for sure. ♪ constipated? yeah. mm. some laxatives like dulcolax can cause cramps. but phillips' caplets don't. they have magnesium. for effective relief of occasional constipation. thanks. [ phillips' lady ] live the regular life. phillips'. thor gets great rewards for his small business! your boa!

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>> gregg: hello, i'm gregg jarrett. welcome to a brand-new hour inside america's news headquarters. >> arthel: i'm arrest they will neville. topping the news, brand-new developments in the search for justice in the deadly firefighter ambush. our legal panel weighs in on the arrest of a woman who police say bought the weapons used in the attack. >> gregg: as the nation reals from a series of random acts of violence like the sandy hook elementary school massacre, more and more teachers are taking up defensive weapons. we have a live report. >> arthel: weather watch, millions of americans getting hit. how they're coping as they try to get home after the holidays. >> gregg: first, with just over 48 hours to go until the fiscal cliff deadline, senate leaders are scrambling at this hour to cut a last minute deal avoiding massive year end tax hikes and spending cuts as president obama warns failure could mean, quote, a self-inflicted wound to the economy. mike emmanuel live.

after a lot of focus on john boehner, kind of sounds like democrats and others are counting on the top senate republican to get a deal. is that about right? mitch mcconnell? >> that is spot on. this has been a lot of talk about senator mitch mcconnell's ability to be a deal maker. one area he's working on is the threshold for extending the bush tax cuts. the $250,000 mark has been what democrats have been pitching. negotiations seem to be heading toward keeping the current tax rate for those making up to $400,000, a key senate conservative sounds hopeful. >> i do think that something will happen over the next few days relative to the revenue piece and hopefully we can rescue most americans from a tax increase. but what we haven't dealt with again is the spending component. >> since it is not expected that increasing the nation's borrowing ability, the debt limit will be part of this deal, conservatives may be able to fight for spending cut when is

that becomes a key issue in the new congress. gregg. >> arthel: if negotiations fail or lawmakers don't like a final deal, president obama wants to move forward with a plan c. what's in that? >> it would focus on three key areas. keeping the tax cuts for those making $250,000 a year or less, extending unemployment benefits and delayed dramatic spending cuts until later next year. president obama says the u.s. cannot afford a politically self-inflicted wound to our economy. >> fortunately congress can prevent it from happening if they act right now. i just had a good and constructive discussion with senate and house leadership about how to prevent this tax hike on the middle class. i'm optimistic we may still be able to reach an agreement that can pass both houses in time. >> the wild card is figuring out what it will take to get a final deal to pass in the house of representatives. they return tomorrow, probably around when we find out if the

top two senators reached an agreement. >> gregg: mike emmanuel live in washington. thanks very much. be sure to watch fox news sunday tomorrow. chris wallace talks fiscal cliff with u.s. senators lindsey graham and diane feinstein. check your local listings for the times. >> arthel: with a possible agreement being worked on behind closed doors to avoid going over the fiscal cliff, one casualty could be the defense department. severe financial cuts could hit every branch of the armed services. peter doocy and minutes -- examines. >> he did not say the word sequester. it would automatically cut more than $100 billion from the budget next year, half from domestic programs programs and m defense programs. as the deadline draws close, experts are looking at them from a national security aspect and warning about their impact on

the safety of our service members. >> it's going to affect the operational force that's deployed in terms of its ability to maintain its equipment, to get repair parts, and that forces deployed around the world. not just the force that's in afghanistan that's being reduced. it would impact on the training of the force and its preparedness to conduct other operations. >> white house officials are saying it's unclear what will happen with the sequester. on friday republican senator john mccain said he doesn't see how a deal gets done without addressing these across the board cuts which could cost a lot of contractors their jobs. >> the large defense contractors will probably be okay. they have significant cash reserves, most of them. the smaller contractors would have trouble getting their lines of credit extended, trouble keeping their employees if they can't be assured of continued employment. >> the only way to i a void the automatic $492 billions in cuts

at the pentagon over nine years is for congress to make a deal in the next two days. >> arthel: thanks, peter. >> gregg: new details on a deadly plain crash out of russia. police are saying that four crew members are dead, four others injured after an airliner landed into one of moscow international airport runways, overshot it and crashd into a highway. the plane which has a capacity of carrying 210 people, was empty as it was on its way home from the czech republic. cause of the crash still unknown. officials are looking into whether a powerful snow storm rolling through the area at the time may be to blame. so we'll keep you posted. >> arthel: the woman who spent 12 years in prison for killing the scarsdale diet doctor has died. jean harris was 89. she claimed it was an accident when she shot her long-time lover, doctor and geraldo authon 1980. she was sentenced to 15 years to

life behind bars. she was granted clemency in 1992 after suffering two heart attacks in prison. >> gregg: junior development in a shooting that stunned the country on christmas eve. two volunteer firefighters were killed in an ambush. two others were injured when they responded to a house fire. the fire was set by a gunman luring the firefighters into a deadly trap. police now arresting 24-year-old dawn nguyen, accusing her of buying the two guns that william spangler used in the rampage and for indicating on a form that she would be the owner of the weapons. spangler killed himself after the shooting. but the u.s. attorney says nguyen will face justice. >> while william spangler may have escaped the criminal justice system, those who provided the firearms to spangler that he used on christmas eve to murder and wound the firefighters and the police officer will not escape

the criminal justice system. >> gregg: what punishment could nguyen face for her alleged crime? our legal panel will join us a bit later on in the show. >> arthel: we're just getting word of the first legal action stemming from the shooting in newtown, connecticut. the family of a six-year-old girl who survived the attack reportedly suing the state for $100 million. the attorney for the girl being identified only as jill doe says she's suffering from trauma, adding that all her friends were killed. the attorney says the law enforcement is about improving school security. it's not about money. >> gregg: new safety concerns are sweeping the country after the newtown school massacre. requests for gun permits skyrocketing and teachers wanting to arm themselves. all this continuing the debate on how to make u.s. schools safer for children. listen to this teacher speaking out. >> it's important because if we have the legal opportunity to change the situation and we're

trained, i think we should be able to do it. it is legal in utah. for teachers to carry. i bought a bra holster. nobody can see it. students wouldn't know. nobody would know. but if something happens, i could easily get it and it stays on me all day. >> gregg: now more from los angeles from claudia. >> just days to go until classes resume after the long winter break. soon more teachers may be allowed to carry concealed weapons with them to work. they already can in states like utah, hawaii, new hampshire and oregon. washington may be next with one newly elected state law maker proposing teachers with concealed weapons permits be allowed to brick their guns into the classroom state representative elect liz pike says she would model the law after a program used by the airlines that allows pilots to bring guns into the cockpit. the clan would be optional and wouldn't cost taxpayers a dime since teachers would be again using their own guns. take a listen.

>> the number one concern for me is public safety in our schools. i don't want our children to be sitting ducks. i don't want teachers to be sitting ducks. and i want to hear any and all ideas. >> pike knows she will face resistance from gun control advocates and others who say arming teachers would be dangerous. in utah, which again allows teachers with permits to carry on campus, a record number attended a training seminar last week to be better prepared if they had to use a gun against an armed intruder. there is no official data on whether gun sales have risen in the past two weeks, but attendance at gun shows is way up and the f.b.i. reporting it's processed more criminal background checks this year compared to last. in colorado, law enforcement officials say they need more money and more staff to keep up with all the criminal background checks that are required. by the way, the process is free and that has one colorado law maker who favors tougher gun restrictions suggesting that

those who want a gun pay for the background check themselves. gregg? >> gregg: claudia live in los angeles. thank you. >> arthel: we have new information concerning president george h.w. bush, currently hospitalized in texas. a spokesman for his office saying mr. bush is showing signs of improvement and is now moved out of the intensive care unit to a regular patient room. the 88-year-old is being treated for a bronchitis-related illness. mike tobin is live in houston with this positive news. mike? >> it's welcome news that the doctors here no longer feel his condition is so fragile that he needs to be monitored in the intensive care unit. therefore, they moved him to a standard recovery room. this coupled with the information that we're getting from the people of the former president's staff saying his condition seems to improve all the time. he spent shy of a week in intensive care and what put him there was a stubborn fever that he had a tough time shaking.

it was brought on by the bronchitis which had him in the hospital since the end of november. throughout the profits, his staff made an effort to be light hearted and optimistic in all of their releases. they cracked jokes throughout the process. they point out the president has been conversational with the staff and true to his own personality, cracking jokes with them, even singing at one point. yesterday he got a little pick me up from the oak ridge boys who phoned in a couple of songs to him and then the next day he moved out of intensive care. so never underestimate the healing power of elvira. >> arthel: music always heals. good to see the president in good spirits. we wish him well. thank you, mike tobin. >> gregg: police in new york city making an arrest in a deadly shove off of a subway platform into an oncoming train. the latest details next. >> arthel: and hollywood mourning the loss of one of the stars of the golden age. remembering the life of legendary actor harry carey, junior, just ahead. >> gregg: and as senate leaders

hold 11th hour talks now to try to avoid massive year end tax hikes and spending cuts, some are showing signs of optimism. so can we expect a deal here or is the nation heading over the fiscal cliff? >> we can still avoid going over the fiscal cliff if the president and the democrat-controlled senate step forward this week and work with republicans to solve this problem and solve it now. [ roasting firewood ]

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>> gregg: time for a quick check of the headlines. police have a suspect in custody in new york city's deadly subway push. the woman apparently made statements implicating herself in thursday's murder of a 46-year-old man. same sex marriages are now legal in the state of maine. the law went into effect at

midnight and authorities immediately began issuing licenses and performing weddings. a french court rejecting a 75% millionaire's income tax scheduled to begin in 2013. the tax would have made the rich contribute a whole lot more to cutting public deficit. >> arthel: here at home as senator leaders work behind closed doors to cut an 11th hour deal to avoid the fiscal cliff, we got a glimpse of optimism on the senate floor on friday from majority leader harry reid and minority leader mitch mcconnell following their white house meeting with president obama. here it is. >> everyone knows we've been to the white house. we've had a constructive meeting. we certainly hope that something will positive will come from that. >> i share the view of the majority leader. we had a good meeting at the white house. we are engaged in discussions, the majority leader and myself and the white house in the hopes that we can come forward as

early as sunday and have a recommendation that i can make to my conference and the majority leader can make to his conference. >> arthel: so is a fiscal deal more likely now than it was before congress left for christmas break? let's have a meeting of the minds. outreach director for freedom works, author of "backlash" and fox news contributor. and michael, former senior communications advisor to john kerry's presidential campaign and ceo of vent squared communications. long intros for both of you hard work people. i'm going with you first on this, danene. president obama says he's modestly optimistic. i ask you if there is going to be a deal tomorrow and if so, will it be temporary, just to get us into next year and if that's the case, how is this going to go over with the public? >> there probably will be some of the republicans are going to

cave. but in my view, i think the republicans should stand their ground because no deal would be better than a bad deal. it makes absolutely no sense for a politician who should be representing the will of the american people to put this patchwork of bill together which will not be good in the best interest of americans. clearly, i don't want taxes to go up. taxes shouldn't go up on anyone. but to only raise taxes on those who are the top earners will only fund the government something like eight days. this is something that the american people need to understand and recognize. there are big failures going on in washington and people need to take notice and hold our politicians accountable. >> arthel: michael? >> if she's right and it's only eight days, why would the republicans hold every american taxpayer hostage for eight days' worth of a deal? there should be a deal on the tax part. it should happen in the next few hours. this is an artificial deadline created by a bunch of

politicians two summers ago because they couldn't consume to an agreement. so that's why we're here on the new year's eve trying to figure out how not to have taxes go up by 99.7% of americans, which is what will happen come new year's day. that's why i think you're going to get it. the politician doesn't want to be the one to say i created the largest tax hike in history. >> arthel: so michael, what would the most beneficial package look like to you and would the lawmakers get to the debt creeling and spending cuts or are they just going to address tax hikes and unemployment benefits? >> yeah, i think the tax hikes and the unemployment benefits are at the top of the table. you have the atm, also on the table for 30 million americans. i think that probably gets settled because there is enough consensus in the middle. i think the senate -- senator reid is amazing at gettin' republican votes on things when he needs to get it. this is one of the times where he'll need to get it because speaker boehner will not be able to pass anything with the

majority of his caucus as proved last week. i think there will be enough pressure not to be the one going over the cliff. 'cause if they waiting to over the cliff, there will be more democratic votes in the senate, more democratic votes in the house. and they could quickly get to fixing the tax problem a day or two after the new congress is sworn in on thursday the 3rd. >> arthel: as michael alluded to, the wheeling and dealing, we know it's going on on both sides of the aisle, burr there is also that intraparty negotiations that's happening. so what would you see are the deal breakers inside the democratic party as well as inside the gop party? >> listen, i really think that they should look at this and look at the fact that when you raise taxes, people have less money to spend. you're harming the middle class, the class that obama is claiming that he wants to help. how about a flat tax? how about real reform in government? again, this is a wake-up call for all americans. people need to pay attention 'cause if your taxes go up, you need to get in front of your representative and let them know you are not happy about the

decisions being made in washington and it really shouldn't come down to this last minute nonsense a day or two where there is this deadline. that's ridiculous. >> arthel: you're right that. is ridiculous. so that's, to me, more vexing for the public than them coming up with any kind of deal if it's going to be temporary or not. get over yourselves, do something, congress. michael, what do you say? >> i agree with you. the congress created this artificial deadline. no one else in the word said it had to be solved by today except they punts add problem from a year and a half ago. but an election happened. president obama has the first democrat in 75 years to win and said $250,000 was his bar. the elections have consequences. so that's a legitimate place to be. everybody that got elected to the house of representatives just got elected, too. and they have a no new tax pledge. you are at logger heads here. i think there is a sweet spot where nobody wants to be the person to raise the taxes that we just talked about and have a big bill come across your table

in january. >> i think really the problem is spending. we've spending problem in our country. look at our debt. our debt is over $16 trillion. our government is spending way too much money. we need to cut back on spending, cut -- >> arthel: where? >> look at the entitlement programs, for example. there's a lot of waste, fraud, and abuse going on there. that is not even on the table. and so listen, we can cut our expenses in our country that is spleeningful and very important for us to do because right now, they're just kicking the can down the road and it's not going to help our economy. >> arthel: waste, fraud and abuse, where? because when regular folks at home hear cut my entitlement, you're looking at the older people when are looking at their medicare or medicaid benefits being affected. >> there is a significant amount of waste, fraud and abuse going on in medicaid and medicare. so that is something i think a needs to be addressed. that's something that has not been looked at. i think that is part of our

problem. >> arthel: michael, you get the last word. >> i don't think you need to hold up the tax issue on the spending. the congress has the power of the purse strings. it has the ability to make these cuts. there is president obama caucus out there for waste, fraud and abuse to continue. so i don't buy that as a reality. the reality is you got to sit down. you got to make the hard choices. the congress has not been willing to do so, partially why they're 18, 19% favor ability. but i don't think any politician in the congress or the president wants people's taxes to go up one, 1, 2, $3,000 a year on average because they can't get to a teal. i think it will happen. >> arthel: michael, d and daneen. by the way, the title of your book is "black lash." i stand corrected. >> thank you. >> arthel: good to see both of you. >> happy new year. >> gregg: a major loss from the golden age of hollywood westerns. harry carey, junior has died. he passed away in santa barbara, california. he was a main stay of classic

westerns, appearing in nine films directed by john ford, including "she wore a yellow ribbon," starring john wayne. he was a fixture on television playing various roles on "bonanza," gunsmoke" and others. he was 91 years old. >> arthel: the northeast is bracing for another blast of winter as the weather radar shows heavy snowfall affecting millions of people. we're live on the ground with the latest. >> gregg: plus, get ready for another big bash. preparations underway right now in new york city to ring in the new year. anna kooiman now with a preview. >> hey there. times square alliance officials tested the confetti this will fall from the sky during monday night's big celebration. i'll preview the party and interview the late dick clark's wife after this break [ male announcer ] alka-seltzer plus presents the cold truth. i have a cold, and i took nyquil,

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but she has some dental issues she's not happy about. so i introduced jill to crest pro-health for life. selected for people over 50. pro-health for life is a toothpaste that defends against tender, inflamed gums, sensitivity and weak enamel. conditions people over 50 experience. crest pro-health for life. so jill can keep living the good life. crest. life opens up when you do. >> arthel: it is the bottom of the hour. time for the top of the news. senate leaders hard at work on capitol hill trying to craft an 11th hour deal to avoid the fiscal cliff. president obama is pressing a basic proposal previously rejected by republicans. >> gregg: and in moscow, at least four people are dead, four more seriously injured after a passenger plane crashed while landing at one of russia's busiest airports.

>> arthel: the u.n. envoy for syria somebodying a dire warning today in a meeting with russia's foreign minister saying the country's civil war could plunge the entire region into chaos unless something is done to solve the refugee crisis. fox extreme weather alert. the northeast[5uzi facing yet ar powerful snow storm in less than a week. look at those picturing, adding up to a heap of trouble for holiday travelers on the roads and at the airports. the storm has already hit the ohio valley and now it is cranking up wind and snow as it moves to the northeast. meg baker of wtxf is live in north town, pen opinion -- pen opinion. it looks dark behind you. i'm trying to see how bad it is. >> it's been a winter wonderland for parts of greater philadelphia area. we're in north town where we see about three inches of snow

tonight. earlier this amp we were in reading when it started to fall. there sticking to the ground. it's kind of wet. a few residents were shoveling their driveways. they reported it wasn't super icy, burr the roads were getting tricky. right now we're at a pen dot location. you can see here that they have the snowplows going. they'll be out all night. they'll travel the different roads, all five counties that really got hit with the snowfall. they'll be traveling the roads. the manager said he has a crew on all night, even though right now the snow slowed down a bit, but there is rain. there's a few flurries going on. >> arthel: looks like it's happening, look outside of our studios here, outside, you're familiar with our studio, you used to work here, and it looks like the same is behind you, it's raining, kind of slushy stuff, messy, but not sticking. the streets are just wet at this point. >> yeah. it's not really sticking at this

point anymore. it's turning to slush. you have to have your boots on. it's pretty cold. the wind hasn't picked up. they advised as the temperatures are cooling down that the roads could ice over. they'll have their crews out and keeping all the drivers safe. >> arthel: that's the thing because even if it's not sticking, the roads are getting wet and it's ice you have to look out for. i agree. >> it's getting slippery. nice to talk to you. live in north town, fox 29 news. >> arthel: good job and say hi to your mom. talk to you later. >> gregg: if you happen to have a new electronic gadget for christmas that santa brought you and then the question is, what are you going to do with the old one? before you decide to just toss it in the garbage, you may want to think twice about filling up landfills and focusly contaminating the environment with a dangerous chemicals inside a lot of those gadgets, like mercury.

>> arthel: that's bad. why not make a few bucks on your old junk. if you can that is. here now is james gou, ceo of grain citizens with ways to resell and recycle your old gadgets responsibly. so tell us how it do it. >> hi. yeah. actually we make it very convenient for you to recycle those items. some value through our buy back and asset recovery program. for those items already too old, we will recycle them free of charge. >> arthel: where do i think them? if i have an old iphone, hour do i get it to where you're talking about, james? >> yes. for apple products, we have a mail in program. you can go to our web site and click the model that you want to recycle and we will tell you what the estimated cost is and then you can mail that to us. after we do the examination, we will send out a check to you. >> arthel: okay. so that's greencitizen.com.

>> gregg: it's gregg jarrett. you have a big warehouse in burlingame, south of san francisco. you had a bunch of people that examine all of these electronic devices and figure out which ones can actually be rehabbed and resold? >> that's right. the best way to recycling is reuse and refurbish. we reclaim about 21% of the recycling items from business and consumer and we try to test it and refurbish to see it can be used as a complete unit or as part. but we only limit it to here in the u.s. >> gregg: what inspired you to do this? >> actually after starting several software companies, i was watching a pbs program by bill moyer in 2004 and i was shocked to realize that 80% of electronics are illegally dumped in the developing country.

and so i spent a couple years traveling around the world, looking at the different system, talking to officials and european union, in the u.s., as well as look at some of the facilities and i found this is after afterthought. that's why i started greenadvise. >> arthel: which is a great idea. what is it that you do to get rid of the dangerous elements of these products that would possibly endanger those children in those countries you're talking about? what do you do? >> one of the major things about greencitizen is that we provide education to the consumer and business because most people don't understand 80% of electronics are dumped. what we do is make it convenient to recycle with us and then we track all the items down to the brand name serial i.d. of the device and then we make sure that the electronic items that -- from the manufacturer are taken apart within 150 miles of our hub in san francisco area. and that's how we can control the whole dumping crisis.

when you leave the equipment, leave the recycling item, shipped for long distance, it's very difficult to track to see if they're being handled properly. >> arthel: on average, how much money can someone get back on like an old phone or computer perhaps? >> it depends on the quality. there is good, you know, iphone 4 could be 100, $108. and iphone 3 could be $20. it's on our web site. >> arthel: you know what? greenadvise.com. everybody who is interested can check it out. a way to make a little money and perhaps save the planet in the meantime. thank you very much. >> thank you. >> gregg: we're talking about -- i was reading through -- tv's printers, phones, computers are the most frequent, but he took in an old security x-ray machine from a consulate. so just about anything and

everything. >> arthel: yeah. i think it's important. >> gregg: check it out. >> arthel: well, guess what gregg preparations underway for the big old night, talking about the biggest new year's eve party on the planet. >> gregg: you don't say. >> arthel: that's why i said planet. workers putting the finishing touches on the huge crystal ball as party goers from around the world flock to the big apple. i was on the plane with some of those guys, anna kooiman is live in new york city. i was on the plane from madrid and they were all clapping when they touched the ground here ready for the big party. >> it's absolutely gorgeous. new york city is all decked out for the holidays already. but we are certainly crossing our fingers that we'll have a little bit better weather on monday night. we have kind of a nasty wet snow fall not guilty midtown, manhattan. but really we're getting all gussied up for the big party, the world's biggest party, earlier today, alliance officials tested out the confetti that will be falling from the sky on monday night at

midnight. and they threw it out a window on unsuspecting people on the street. more than a million revellers will be packing into times square to watch the ball drop money night and a billion more will be watching from home. the 2013 sign is already situated on top of one times square. seven feet tall. after four decades of deck clark helping america ring in the new year, 2013 will be the first celebration following his death. the special waterford crystal with his name engraved on it will be in the ball this year. we spoke with dick clark's wife who says she remembers watching the weather report this time of year since she knew they would be outside for so many hours. always looked forward to their new year's eve kiss. >> i started to separate the only way i can deal with this, is i think of the television dick clark, not my husband. then i can deal with it. if i have to think of that's my husband, he's not here, that's hard. >> depending who you ask, 13 is lucky to some. unlucky it others.

for the people who are superstitious out there dreading 2013, no need to fear, there are good luck charms attached to that 13 that's going to be falling along with the ball on monday night. guys, back to you. >> arthel: bring it on! bring on 13. just bring it on. see you later. >> gregg: i've had it with 12. i'm so done with 12. police making an arrest in connection with the shooting of firefighters in webster, new york, accusing a woman of buying the guns that were used in the ambush. now she's behind bars, but is she responsible for the death of two very brave men? a question of crime and punishment as our legal panel is here to weigh in. plus a 50% annual bonus. and everyone likes 50% more... [ midwestern/chicago accent ] cheddar! yeah! 50 percent more [yodeling] yodel-ay-ee-oo. 50% more flash. [ southern accent ] 50 percent more taters. that's where tots come from. [ male announcer ] the capital one cash rewards card

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>> gregg: new legal twist involving the horrific killing of two volunteer firefighters on christmas eve. gunman who ambushed the first responders, 62-year-old william spangler took his own life, but the case does not end there as a convicted felon who spent 17 years in prison for bludgeoning to death his own grandmother. he was not allowed to own any guns. well, police have arrested his neighbor, 24-year-old dawn nguyen, saying she bought the guns that spangler used in the rampage and did so you should false pretenses. here is the prosecutor. >> the precise charge against dawn nguyen has to do with lying

during her purchase of these two weapons. according to the publicly filed complaint, dawn nguyen told the seller of these guns, gander mountain located in henrietta, new york, that she was to be the true owner and buyer of the guns instead of william spangler. >> gregg: so what is her ultimate responsibility, if any at all and what punishment should she face? let's bring in our legal panel, defense attorney and tad nelson, also a defense attorney and former prosecutor. david, you think the focus here is a bit misplaced? >> well, obviously spangler is the killer. there is no question about that, gregg. you know, when miss nguyen went into the gun shop, she got this form, the atf 4473 form and right at the top you'll note it says $250,000 fine and ten years

in state prison ifie on that form. so it's hard for me to believe that she actually lied on the form to give guns to a guy she barely even knew? there is also, it's important to know, no indication whatsoever that she knew of his background, knew of his conviction for manslaughter, knew that he was a felon, because if that was the case, she could be facing charges of conspiracy or accessory. so i do think it's misplaced. they do want a conviction for somebody because spangler killed himself. but it should not be with her. >> gregg: here is the trouble, i've been reading in the news accounts, she apparently texted a sheriff's deputy in monroe county. here is a quote, she later called the deputy and admitted she bought the guns for spangler. so she could be in double trouble here because she may have already lied to police and now has confessed to a deputy on top of the official charge of buying a gun under false

precontinueses. >> absolutely, gregg. the issue, as far as the lying to the deputy with the tax and making the phone call, that's trivial compared to the buying of the gun. and i just disagree with what he's saying over there. in this situation, when you purchase a gun for somebody, you have no intentions of owning this gun. clearly she knows she's violating the law. there is obviously a reason why he can't have the gun. and when you purchase a gun for somebody, you are gonna to reap what you sow. in this case, ten years, which is the maximum, is what she should pay here. ultimately people lost their lives because of her carelessness. i'm sure dawn nguyen is a nice person and she probably never will do anything else wrong in her life. but this was careless and it cost lives. you know how things are going in this country. we got to lay down the law and put an end to all the nonsense with the guns. that's the issue. >> there is a terrible incident with the guns, but you don't use that, for example n connecticut

to condemn -- >> sure you do. >> here is the thing, she said -- her and her brother indicated that the guns were stolen out of her trunk. they've given that statement many times. >> that's a lie. >> suddenly law enforcement officer says that she texted him and then confessed to buying the gun for spangler? it doesn't make sense. i'd like to see that text. i question that officer's reliability. >> gregg: that will be a question of fact to be resolved by a jury if there is a trial. david, as to tad's argument here, look, two firefighters lost their lives and she had to have known something about this guy because he was already a paroled killer. >> whether she knew that or not is completely unknown. i cannot attribute that knowledge to her whatsoever. i don't have any indication that she knew that. for all i know, and let's -- assuming arguing that she bought the gun for him, it may be that he told her that he had no money to purchase the guns.

it may be that he told her he may have coerced her. he may have made promises we don't know that either. there could be have been threats made. there are a number of reasons that she could have purchased those guns. again, assuming she did buy them for him. another thing, if she did that, she had to have known when she signed that atf 4473 that she was going to transfer them immediately to him because if she decided -- >> arthel: she may not have -- >> gregg: she may not have read the form. >> right. >> absolutely. >> gregg: i'll let you have the last word, tad. >> gregg, most people don't read the forms. and especially in a situation like this. this weeks of doing a favor for a neighbor, probably getting a couple hundred bucks. the bottom line is, when you hand somebody a weapon in this country, you should be responsible. it's that simple. three people died. somebody's got to pay the fiddler. it needs to be dawn nguyen. >> gregg: but for her actions, those three people might still be alive. >> without a doubt.

>> my advice, read the forms. if she didn't, that was not a smart idea. >> gregg: people never read the forms. all right. david, tad, thanks very much. >> thanks. >> arthel: with the clock winding down to massive year end tax hikes and spending cuts impacting nearly every american, who will take the blame if the nation heads over the fiscal cliff? scott rasmussen joins us with brand-new polls coming up next this is america.

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>> gregg: just over 48 hours to go until massive tax hikes kick in for nearly every american. what are the polls telling us about who is to blame in the fiscal cliff crisis? >> arthel: according to a brand-new poll from rasmussen

reports, 44% will blame congress if we go over the cliff. 36% will blame president obama. and 15% will blame both. >> gregg: joining us now independent pollster and founder and president of rasmussen reports, scott rasmussen. scott, we certainly have been getting a lot of e-mails over the course of the last couple of weeks and arrest they will has a -- arthel has a great one. >> arthel: this is from a friend of mine who lives in san diego. she sent a text, she says, fiscal cliff issues drive me crazy! they should not get paid until it's resolved and we have a meaningful budget. none of us could run our household the way washington runs things. what do you say to that? >> you know, that's the real story here. people are looking at these kids in washington who are just messing up and can't do the basics. they're disgusted with both political parties and i think all of our political leaders are going to have a hard time regaining any legitimacy or credibility after this is done one way or the other.

it is true congressional republicans are faring a little worse than the president. but people are pretty fed up with the entire process. >> gregg: the president keeps saying he wants to raise taxes on the rich. but how do folks in the middle class feel about whether their taxes are going to go up? are they pessimistic? >> 49% of all voters he expect middle class taxes will go up as part of any deal to avert the fiscal cliff. there is a general expectation that over the next couple of years, middle class taxes are heading up. bun of the dirty little secrets of these fiscal cliff discussions, they keep talking about extending the bush tax cuts, but there is payroll taxes that are going up on the first of the year. i think there is potential for a very ugly situation if political leaders say we stop all the tax hikes on the middle class, we reached this deal, and then someone looks at their paycheck and see their payroll taxes have gone up, they're not going to appreciate that. >> gregg: that's right. >> arthel: that's for sure. so we'll stay in washington, but let's talk about this.

senator kerry being the next secretary of state. let's look at your polling and see how people are reacting to that. 47% are favorable and 42 unfavorable. correct? >> that's right. there is two things. one thing unusual, one thin standard about this. most new cabinet members are pretty unknown. so it's unusual to have somebody with such a high level of name recognition. senator kerry has run for president. he's been a very visible leader in the democratic party for a long time. the next part, guess what? democrats think he's great. republicans think he's a bum. the good news for senator kerry, president obama gets better marks for his handling of foreign policy than he does on the economy. he is stepping in to a good area at this point in time. >> gregg: well, as gloomy as things are with the debt ceiling, the fiscal cliff, are people pretty happy with their lives? you measured that. >> yeah. 80% say they're happy with their lives. this is a good reminder that

what really matters to people doesn't take place in washington most of the time. i had a chance yesterday to speak to a senior republican and a senior democrat, entirely different conversation, both of them said, you've got to remember, we still have a great nation. it's our government that's broken. >> arthel: 2003 have a -- 2003 have a great nation. that's for sure. scott, happy new year to you. >> happy new year. i'm going to be with 62% of americans who are at hamate at midnight and also with the 49% who get to kiss someone. hope you have a great new year. >> arthel: i'm with you on all of the above, mr. rasmussen. all righty. >> gregg: i'm gog stay out of that. >> arthel: we're not kissing each other. we're not starting any rumors here. >> gregg: i was going to go there. >> arthel: i can see it in your eyes. >> gregg: yeah. that's going to do it for us. kathy wright and heather childers will be taking over top of the hour. >> arthel: they'll let us work together tomorrow at 4 eastern. thanks to alex huntser for the

text. >> gregg: we'll see you tomorrow. have a great evening. ♪ ♪ ♪ [ male announcer ] everyone deserves the gift of all day pain relief. this season, discover aleve. all day pain relief with just two pills.